The tyranny of E&M reimbursement cuts with same-day procedures

 

You know, some days the burdens of insurance regulations just wear you down. One example is the automatic 50% cut in your evaluation and management (E&M) reimbursement if you perform any other services on the same patient on the same day.

So how did this all start? In 2004, the Health & Human Services (HHS) Office of the Inspector General (OIG) reported that 35% of claims appended with modifier -25 did not meet the required threshold to be appropriate. In response, the OIG encouraged carriers to reexamine their reviews and policies. Rather than go to the trouble to audit providers and ask for refunds, some private insurers took things a step further and just cut everybody’s reimbursement by 50%.

Nastco/Thinkstock

In 2012, Harvard Pilgrim HealthCare in Boston and Anthem Blue Cross Blue Shield of Kentucky were among the first to cut E&M reimbursement. After a meeting with the American Academy of Dermatology, Anthem rescinded its policy. Pilgrim persisted, however, and in 2014, similar cuts were instituted at Tufts Health Plan – and Blue Cross & Blue Shield of Rhode Island took the same approach in 2016. Most recently, Independence Blue Cross has applied the 50% cut in Philadelphia and southern New Jersey.

I’m sure insurers call this “revenue enhancement” or “revenue neutral policy changes.” To my mind, it’s just more “how do we squeeze doctors on a regular basis.” And it’s behavior that is so wrong on so many levels.

One of the reasons dermatology is such a rewarding specialty is that you can usually make the patient better on the same day by diagnosing and dealing with the condition. That incentive is crushed when reductions lower the reimbursement for diagnosing and treating a patient on the same visit to below the overhead costs of rendering the services.

In addition, procedure codes that are billed with an E&M have already been tagged more than 50% of the time, and the value reduced by the relative value update committee upon review. The E&M reduction is built into the payment system for the codes that dermatologists use. The -25 modifier is specifically intended to allow for an evaluation code on the same day as a procedure. This is correct CPT [Current Procedural Terminology] coding convention.

So, how can dermatologists respond to these “takings” by the insurance company?

First, review your contract and see if the insurer is required to follow CPT coding convention. If they are, you have a strong case for insisting on appropriate reimbursement. If they’re not, either renegotiate with them or drop out of these insurance plans. This approach is difficult for most dermatologists affected by these plans, because 25%-40% of the local private insurance market is controlled by these insurers. This situation is a fine example of the problems with oligopolies, and a good reason for opposing market consolidation of insurers, which the American Medical Association did successfully last year by resisting the attempted mergers of Aetna and Humana, and Anthem and Cigna.

Remember that not all patient problems must be dealt with during the same visit. When problems are not emergent, it is not unreasonable to schedule another procedure at a later time. Think back to medical school and the surgery rotation in which “lumps and bumps” were scheduled all week long for Friday afternoon.

Also, turn to your patients and encourage them to complain about unreasonable policies. They are the ones who really are being shortchanged on their insurance coverage. While dermatologists are heavily affected by these reductions, so are ENTs, podiatrists, hematologist/oncologists, and family medicine and internal medicine physicians.

The American Academy of Family Physicians has some interesting material on this topic on their website. They often must deal with preventive care and illness visits for the same patient on the same day. They suggest initiating a dialogue with the patient about multiple visits before a first visit.

Be forewarned that Independence Blue Cross has recently circulated guidance stating that breaking up appointments or scheduling procedures for later appointments might result in termination. While I consider such threats balderdash and unenforceable, you should review your contracts.

The American Academy of Dermatology and the Pennsylvania and New Jersey Dermatological Societies are fighting these policies. Ultimately, this is a contract issue between you and your insurer. And you need to question the value of a contract that presumes indentured servitude.


 

Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.

 

You know, some days the burdens of insurance regulations just wear you down. One example is the automatic 50% cut in your evaluation and management (E&M) reimbursement if you perform any other services on the same patient on the same day.

So how did this all start? In 2004, the Health & Human Services (HHS) Office of the Inspector General (OIG) reported that 35% of claims appended with modifier -25 did not meet the required threshold to be appropriate. In response, the OIG encouraged carriers to reexamine their reviews and policies. Rather than go to the trouble to audit providers and ask for refunds, some private insurers took things a step further and just cut everybody’s reimbursement by 50%.

Nastco/Thinkstock

In 2012, Harvard Pilgrim HealthCare in Boston and Anthem Blue Cross Blue Shield of Kentucky were among the first to cut E&M reimbursement. After a meeting with the American Academy of Dermatology, Anthem rescinded its policy. Pilgrim persisted, however, and in 2014, similar cuts were instituted at Tufts Health Plan – and Blue Cross & Blue Shield of Rhode Island took the same approach in 2016. Most recently, Independence Blue Cross has applied the 50% cut in Philadelphia and southern New Jersey.

I’m sure insurers call this “revenue enhancement” or “revenue neutral policy changes.” To my mind, it’s just more “how do we squeeze doctors on a regular basis.” And it’s behavior that is so wrong on so many levels.

One of the reasons dermatology is such a rewarding specialty is that you can usually make the patient better on the same day by diagnosing and dealing with the condition. That incentive is crushed when reductions lower the reimbursement for diagnosing and treating a patient on the same visit to below the overhead costs of rendering the services.

In addition, procedure codes that are billed with an E&M have already been tagged more than 50% of the time, and the value reduced by the relative value update committee upon review. The E&M reduction is built into the payment system for the codes that dermatologists use. The -25 modifier is specifically intended to allow for an evaluation code on the same day as a procedure. This is correct CPT [Current Procedural Terminology] coding convention.

So, how can dermatologists respond to these “takings” by the insurance company?

First, review your contract and see if the insurer is required to follow CPT coding convention. If they are, you have a strong case for insisting on appropriate reimbursement. If they’re not, either renegotiate with them or drop out of these insurance plans. This approach is difficult for most dermatologists affected by these plans, because 25%-40% of the local private insurance market is controlled by these insurers. This situation is a fine example of the problems with oligopolies, and a good reason for opposing market consolidation of insurers, which the American Medical Association did successfully last year by resisting the attempted mergers of Aetna and Humana, and Anthem and Cigna.

Remember that not all patient problems must be dealt with during the same visit. When problems are not emergent, it is not unreasonable to schedule another procedure at a later time. Think back to medical school and the surgery rotation in which “lumps and bumps” were scheduled all week long for Friday afternoon.

Also, turn to your patients and encourage them to complain about unreasonable policies. They are the ones who really are being shortchanged on their insurance coverage. While dermatologists are heavily affected by these reductions, so are ENTs, podiatrists, hematologist/oncologists, and family medicine and internal medicine physicians.

The American Academy of Family Physicians has some interesting material on this topic on their website. They often must deal with preventive care and illness visits for the same patient on the same day. They suggest initiating a dialogue with the patient about multiple visits before a first visit.

Be forewarned that Independence Blue Cross has recently circulated guidance stating that breaking up appointments or scheduling procedures for later appointments might result in termination. While I consider such threats balderdash and unenforceable, you should review your contracts.

The American Academy of Dermatology and the Pennsylvania and New Jersey Dermatological Societies are fighting these policies. Ultimately, this is a contract issue between you and your insurer. And you need to question the value of a contract that presumes indentured servitude.


 

Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.

 

You know, some days the burdens of insurance regulations just wear you down. One example is the automatic 50% cut in your evaluation and management (E&M) reimbursement if you perform any other services on the same patient on the same day.

So how did this all start? In 2004, the Health & Human Services (HHS) Office of the Inspector General (OIG) reported that 35% of claims appended with modifier -25 did not meet the required threshold to be appropriate. In response, the OIG encouraged carriers to reexamine their reviews and policies. Rather than go to the trouble to audit providers and ask for refunds, some private insurers took things a step further and just cut everybody’s reimbursement by 50%.

Nastco/Thinkstock

In 2012, Harvard Pilgrim HealthCare in Boston and Anthem Blue Cross Blue Shield of Kentucky were among the first to cut E&M reimbursement. After a meeting with the American Academy of Dermatology, Anthem rescinded its policy. Pilgrim persisted, however, and in 2014, similar cuts were instituted at Tufts Health Plan – and Blue Cross & Blue Shield of Rhode Island took the same approach in 2016. Most recently, Independence Blue Cross has applied the 50% cut in Philadelphia and southern New Jersey.

I’m sure insurers call this “revenue enhancement” or “revenue neutral policy changes.” To my mind, it’s just more “how do we squeeze doctors on a regular basis.” And it’s behavior that is so wrong on so many levels.

One of the reasons dermatology is such a rewarding specialty is that you can usually make the patient better on the same day by diagnosing and dealing with the condition. That incentive is crushed when reductions lower the reimbursement for diagnosing and treating a patient on the same visit to below the overhead costs of rendering the services.

In addition, procedure codes that are billed with an E&M have already been tagged more than 50% of the time, and the value reduced by the relative value update committee upon review. The E&M reduction is built into the payment system for the codes that dermatologists use. The -25 modifier is specifically intended to allow for an evaluation code on the same day as a procedure. This is correct CPT [Current Procedural Terminology] coding convention.

So, how can dermatologists respond to these “takings” by the insurance company?

First, review your contract and see if the insurer is required to follow CPT coding convention. If they are, you have a strong case for insisting on appropriate reimbursement. If they’re not, either renegotiate with them or drop out of these insurance plans. This approach is difficult for most dermatologists affected by these plans, because 25%-40% of the local private insurance market is controlled by these insurers. This situation is a fine example of the problems with oligopolies, and a good reason for opposing market consolidation of insurers, which the American Medical Association did successfully last year by resisting the attempted mergers of Aetna and Humana, and Anthem and Cigna.

Remember that not all patient problems must be dealt with during the same visit. When problems are not emergent, it is not unreasonable to schedule another procedure at a later time. Think back to medical school and the surgery rotation in which “lumps and bumps” were scheduled all week long for Friday afternoon.

Also, turn to your patients and encourage them to complain about unreasonable policies. They are the ones who really are being shortchanged on their insurance coverage. While dermatologists are heavily affected by these reductions, so are ENTs, podiatrists, hematologist/oncologists, and family medicine and internal medicine physicians.

The American Academy of Family Physicians has some interesting material on this topic on their website. They often must deal with preventive care and illness visits for the same patient on the same day. They suggest initiating a dialogue with the patient about multiple visits before a first visit.

Be forewarned that Independence Blue Cross has recently circulated guidance stating that breaking up appointments or scheduling procedures for later appointments might result in termination. While I consider such threats balderdash and unenforceable, you should review your contracts.

The American Academy of Dermatology and the Pennsylvania and New Jersey Dermatological Societies are fighting these policies. Ultimately, this is a contract issue between you and your insurer. And you need to question the value of a contract that presumes indentured servitude.


 

Dr. Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at dermnews@frontlinemedcom.com.